Form 8949 (Sales and Other Dispositions of Capital Assets)
The IRS form used to report each individual sale or disposition of a capital asset, with totals flowing to Schedule D.
Detailed Explanation
Form 8949 reports the date acquired, date sold, sales proceeds, cost basis, and resulting gain or loss for each transaction. Transactions are categorized as short-term (held one year or less) or long-term (held more than one year) and as having basis reported, not reported, or not provided to the IRS. For 2025 and forward, digital asset (cryptocurrency) transactions are reported on Form 8949 with broker-issued 1099-DA reconciliation.
Key Points
- Reports each individual sale or disposition; totals flow to Schedule D.
- Transactions are split short-term (held one year or less) vs long-term (held more than one year).
- Codes classify whether basis was reported to the IRS (Box A/D), not reported (Box B/E), or not on a 1099-B (Box C/F).
- Used to correct broker basis errors, which are a common source of CP2000 notices.
- Crypto and other digital asset sales are reported here for 2025 forward, reconciled to Form 1099-DA.
Practical Example
You sold three lots of stock during the year. A 1099-B reports two of them with basis (entered with Box A/D codes) and one was an RSU sale where the broker showed $0 basis. On Form 8949 you adjust the RSU lot using code B to add the correct basis (the vesting-date value already taxed on your W-2), avoiding double taxation. The net gain carries to Schedule D.
Related TS CPA Service
Tailored and accurate tax preparation, because your financial situation deserves more than a template.
Learn about Individual Tax PreparationRelated Terms
Capital Gain
The profit realized from the sale of a capital asset such as stock, real estate, or cryptocurrency, taxed at preferential rates if held longer than one year.
Tax Basis
The amount of investment in an asset for tax purposes, used to determine gain or loss when the asset is sold or otherwise disposed of.
Tax-Loss Harvesting
A strategy of selling investments at a loss to offset capital gains and up to $3,000 of ordinary income annually.
Have a Question About Form 8949 (Sales and Other Dispositions of Capital Assets)?
Get a free, no-obligation answer from a licensed CPA. We respond the same day.
Free Consultation